You may think that when you retire with social security and a pension, that you will be off-the-hook for past due child support payments. While most creditors cannot get at these retirement funds, there are a few exceptions. Social security and pensions can be subject to garnishment if you owe money to the government in the form of back taxes, defaulted student loans and, yes, child support and alimony.
The harshest treatment of these retirement benefits is often for those pesky back taxes – if you owe the IRS your benefits are subject to a 15% levy regardless of your financial situation. As for student loans, the first $750 in benefits is off limits, but after that, 15% of the remainder is subject to garnishment. Child support and alimony garnishment on social security benefits are determined by state law not to exceed maximums set by the Consumer Credit Protection Act. However, the maximum limit is not exactly forgiving…your social security can be reduced anywhere from 50 to 65 percent to catch up on child support payments or spousal maintenance. This grants the state plenty of discretion when it comes to docking your social security benefits for arrears.
If you feel that you are paying more in child support or alimony than you should be, better to move to reduce your obligation now to avoid carrying over debt into retirement. There are many reasons why a child support or a spousal maintenance post-decree modification may be necessary for your family including employment changes, injury or illness, remarriage, new children or a change in custody or visitation patterns. Whether you are the party seeking a modification or you are opposing one, the Law Offices of Ronald L. Bell can help. We will fully represent our clients’ interests to make sure they have a fair arrangement when it comes to divorce, child custody and support, property division and spousal maintenance.
Source: The Motley Fool, “Can Garnishments Be Put on Social Security or Pension Income?”, accessed October 19, 2015.